Pound shifts higher as second referendum hopes gain traction
Pound shifts higher as markets factor in potential second referendum, while Brexit woes over UK motorists begin
Prime minister Theresa May’s no-confidence vote has impacted the markets, but the impact has only been contained to the UK and European markets, and mostly in currencies and bonds, according to IG market analyst, Kyle Rodda.
‘Interestingly enough, Labour's failed no-confidence motion has markets betting that a second referendum could be on the cards. The Pound has shifted higher after the initial vote on the basis of that.’ Mr Rodda said.
Sterling rose 0.05% against the dollar to $1.287 on Wednesday after May’s Brexit deal was defeated, but steadied after May's government won the no-confidence vote overnight.
May's Plan 'B' due by Monday has the market reacting with the assumption that there could be an extension of the Article 50 exit date past March 29.
No Brexit deal troublesome for UK motorists
Meanwhile, a UK insurance trade body has warned UK drivers that if politicians fail to strike a Brexit withdrawal deal, driving in the EU could become illegal without insurance.
The Association of British Insurers (ABI) warns consumers and companies who plan to travel by road In the EU after Brexit day, may need to provide a ‘green card’ from their insurer one month in advance.
The advice came just one day after prime minister Theresa May’s proposed Brexit deal was ousted by MPs.
The ABI said the European Commission has failed to confirm a waiver of the green card scheme that was agreed by insurance authorities in May, with the same requirements applying to EU motorists travelling to the UK after Brexit.
According to the ABI in 2017, 2.4 million heavy good vehicles travelled from the UK to the continent, while a further 370,000 travelled to Northern Ireland, according to official statistics.
‘It remains the case that insurers do not want a 'no deal' Brexit; it would be bad for the economy and bad for our customers. We continue to hope these arrangements are never needed and urge the Government, UK Parliament and EU27 to agree an orderly way forward,’ said ABI Director General Huw Evans.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Please see important Research Disclaimer.
Trading around Brexit
Find out how the UK’s exit from the EU continues to affect traders, and discover:
- The unique opportunities in a ‘hard’ and ‘soft’ Brexit
- The markets you should be watching
- Everything that’s happened so far
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.